Multinational Corporations

What are ways corporations benefit from multi-national expansion

• access to cheaper (and possible well skilled) labor and other resources

• more relaxed gov regulations

• increased bargaining leverage with labor due to substitution alts

• other econ benefits: access to markets, tax advantages, currency diversification

What is outsourcing?

obtain (goods or a service) from an outside or foreign supplier, especially in place of an internal source.

Why Were HR and LR Originally Decentralized within MNC’s?

• Country legal, cultural, and historical differences

• Production was decentralized given limited trade

• Contrast to other corporate functions such as finance and marketing

Why might LR be centralized within MNCs?

• Regional trade pacts—EU, NAFTA, Mercosur, ASEAN

• Expansion of global trade and MNC’s

• Production consolidation—regional centers of excellence

What do MNCs do with their LRs when they don’t outsource (keep production in-house)

• Regional LR/HR staffs are being created in some MNC’s

• More cross-country coordination of corporate policies

• More frequent cross-country comparisons of LR/HR performance

  • affecting investments and plant closings

• Local manager concerns with the above

• Balancing the virtues of central coordination and control with the advantages of local flexibility and responsiveness to culture, law, history, politics etc